The future is electric, at least that is what it seems like if we are to believe the incredible investor confidence being shown in Rivian's spectacular Wall Street debut.
Beating almost all estimates Rivian set the 2021 record for an IPO and is now valued at $100 billion. Shares subsequently surged by as much as 50% at one point but eventually closed at around 30% better, with a nice round of $100 per share price at the close. It begs belief that they are now the world’s third most valuable automaker, behind Tesla, the only trillion dollar automaker in the world.
It is a nod to where people believe the future is and how certain players are going to reshape the automotive landscape.
Blue Chip Investors
Two of Rivian’s biggest investors to date can take a lot of credit for their sensational debut, with several investors already familiar with them.
Ford, ironically worth significantly less than Rivian, holds a 12% stake and if they choose to keep that investment, which at this point seems likely, it will be in their interest for the company to succeed. Having a partner in the automotive industry is something Tesla would have loved as they came painfully close to closing their doors thanks to their lack of experience and in some cases expertise, in the industry.
With Ford in the picture, they will have access to a wealth of industry experience and more importantly a deep understanding of how to set up an effective production and distribution network.
Incredible Potential With Perfect Timing
There is little doubt Rivian has spent their money wisely over the last decade, with much investment into the actual product and investment into marketing timed well.
They were able to create a buzz around the pickup once it was very nearly ready for the market as opposed to other startups clearly investing heavily in marketing and trying to gauge the public interest and then attempting to attract more investment from hype, rather than an actual product's real-world potential. Rivian has what we can all agree is a future-proof product and although it is still too early to say if they will be the all-conquering company Tesla has evolved into, it seems likely that they will at the very least exist alongside them and all the other global players.
Their timing is what seems to set them apart more than anything else, hitting the market now is actually favorable for them because most consumer skepticism and resistance to EVs have already been overcome as charging networks are growing. The IPO date was also no accident as it coincided with the initial COP26 summit’s closing date, as the world looked at the importance of finding solutions to the climate crisis, they pretty much stood there and declared, “Hey, we have a solution for you right here.”
Crowded EV Market
Many new manufacturers are crawling out of the woodwork all over the world but the biggest threat to Rivian may indeed come from their own investors.
With Ford set to launch the F150 Lightning early next year with a far more attainable price tag we can only wonder just how many potential sales they have already lost to Ford. Their main investor, Amazon (own 20%) is doing the opposite by ordering a fleet of Rivian made vans but there are several other competitively priced EVs that are going to hit the market soon, not least of which the polarising Tesla Cybertruck which will make life very difficult for Rivian.